Commissioner of Income Tax Versus M/s. International Tractor Ltd.

2017 (12) TMI 311 - DELHI HIGH COURT

Deduction U/s 80 (1A) - whether the assessee should be a small scale undertaking on the last day of the previous year relevant to the initial/first assessment year and that the said requirement need not be satisfied in the subsequent assessments? - Held that:- As decided in Commissioner of Income Tax Versus International Tractors Ltd. [2017 (7) TMI 822 - DELHI HIGH COURT] that the Assessee here did not fulfil the eligibility condition for the initial AY i.e., 1997-98; and that notwithstanding th .....

Agrawal, Advs. S. RAVINDRA BHAT, J.(ORAL) 1. The following two questions of law were framed on 18.05.2006: (i) Whether the Tribunal was correct in holding that for purposes of deduction U/s 80 (1A) of the Income Tax Act, 1961, the assessee should be a small scale undertaking on the last day of the previous year relevant to the initial/first assessment year and that the said requirement need not be satisfied in the subsequent assessments? (ii) Whether the impugned order dated 1.3.2004 could be va .....

and 05.09.2008 respectively). Those became the subject matter of appeals before this Court i.e. ITA Nos.1082/2005, 690/2008, 225/2009, 1189/2009 and 251/2010. All those appeals by the Revenue, urging common questions with respect to admissibility of the benefit/deduction under Section 80-1A of the Act, were dismissed; the questions of law were answered against the Revenue. 3. The lone question which survives for the decision by this Court is as to the character of the determination made by the I .....

ng the judgment in open court as it were, did not exist before the judgment in Commissioner of Income Tax v. Sudhir Choudhrie (2005) 278 ITR 490 (Del). As a result of that judgment, Rule 34 was inserted in the ITAT Rules to facilitate that procedure. The Court, in its order of 04.05.2017 noticed and held that since the change of Rule was prospective, there was no illegality - to an order on account of signature of Shri Ram Bahadur on 01.03.2004 even though its author had signed it earlier. 4. In .....

nder Section 80-1A of the Act had not been claimed by the assessee. It was contended that for the subsequent years too the assessee could not claim such status given the nature of its investment. 6. It is pointed out on behalf of the assessee, on the other hand, that the common judgment of this Court in M/s International Tractors Ltd. (supra), dated 20.07.2017 has in fact dealt with all issues including the permissibility of the benefit under Section 80-1A of the Act for subsequent years, when i .....

fulfilled. As rightly pointed out by Mr. Vohra in the initial AY 1997- 98, the Assessee was facing a loss and, therefore, did not make a claim. Nevertheless that continued to remain the initial AY. The Assessee claimed deduction only in regard to the remaining years. The ten years would begin to be counted from the AY 1997-98 itself although the deduction was not claimed for that AY. It could not have been claimed for AY 1997-98 because under Section 80- IA, the aggregate deduction claimed of th .....

CIT(A) and the ITAT is that the Assessee did fulfil the eligibility condition. The total investment in P&M was worked out to be ₹ 41.19 lacs. This fact has not been controverted by the Revenue. ***** ***** ***** 63. In view of the authoritative pronouncements of the Courts as discussed hereinbefore, the Court is unable to accept the plea of the Revenue in the present case that: (i) The Assessee here did not fulfil the eligibility condition for the initial AY i.e., 1997-98; and (ii) Tha .....